Alabama Medicaid Update Tina G Pippin Dental Program Director Alabama Dental Association Annual Session June 16, 2006

1. Alabama Medicaid UpdateTina G PippinDental Program DirectorAlabama Dental Association Annual SessionJune 16, 2006

2. Medicaid Overview

3. Medicaid “Rules” • Medicaid was established in 1965 by federal law to provide medical assistance to low income and resource individuals. • States may choose to have a Medicaid program, but must comply with all federal Medicaid requirements once a program has been implemented. • Funded through a federal and state partnership (generally 70/30 in Alabama)

4. “Rules” continued • Federal law sets minimum eligibility and benefit levels. • With few exceptions, Alabama’s program is at the federal minimum level for eligibility. • Alabama has one of the most conservative benefit packages in the country. • Medicaid cannot make any more program cuts and still be in compliance with federal regulations.

5. Don’t be confused… • Medicaid is a federal and state program and provides medical assistance to low income and resource individuals. • Medicare is a federal program to provide medical insurance generally to individuals aged 65 and older.

6. Who Determines Eligibility • Three Alabama agencies certify individuals for Medicaid. • Agencies certify certain groups of individuals for Medicaid based on their circumstances. • These agencies are: • The Social Security Administration • The Department of Human Resources • The Alabama Medicaid Agency

7. The Face of Medicaid

8. Demographics FY 2005 • Medicaid covers: • 20.7% of Alabama’s total population (includes all eligibility categories) • 46% of all deliveries in Alabama • 37.9% of Alabama’s children (under 19) • 19.7% of Alabama’s elderly (65 and above) • 74% of nursing home days in Alabama

9. Total Medicaid Eligibles As a Percentage of Alabama’s Population FY Note: Includes individuals eligible for Plan First

10. Medicaid Children Under age 19 as a Percent of Alabama’s Child Population FY

11. Children in Working Families As of September 2005 Source: Obtained for MLIF and SOBRA populations based on information from Medicaid applications as filed.

12. Eligible and Payment Distribution By AgeFY 2005

13. Medicaid Eligibles by Aid CategoryFY 2005

14. Eligibles Percent Distribution by Race FY 2005

15. Cost Per Eligible FY 2005 By Category By Gender By Age

16. Economic Impact Hospital Care Pharmacy MEDICAID Primary Care Maternity Care

17. High Medicaid Counties FY 2005 These 12 counties have the highest concentration of Medicaid eligibles across the general population (30% or greater). Bullock 35% Lowndes 33% Butler 33% Macon 31% Conecuh 31% Marengo 30% Dallas 41% Perry 43% Greene 40% Sumter 39% Hale 32% Wilcox 46%

18. High Medicaid Counties FY 2005 These 11 counties have the highest concentration of Medicaid eligibles across the children’s population (50% or greater). Bullock 66% Lowndes 55% Butler 56% Macon 50% Conecuh 56% Perry 63 % Dallas 65% Sumter 65% Greene 66% Wilcox 71% Hale 50%

19. Economic Impact • In FY 2004, Medicaid paid approximately $3.7 billion to providers for various health care services rendered; $2.7 billion represents federal funds brought into the State. • In FY 2005, Medicaid paid approximately $3.9 billion to providers for various health care services rendered; $2.8 billion represents federal funds brought into the State.

20. Economic Impact(continued) • Medicaid expenditures supported more than 84,323 jobs in various industries within the state.1 1 Economic Impact of the Alabama Medicaid Agency on the Economy of the State of Alabama and its Counties, Amy K. Yarbrough, MSHA, MBA, Administrative Fellow, University of Alabama at Birmingham

21. Financial Impact by County • Medicaid payments • 5 counties receive in excess of $100 million • Jefferson $520 million • Mobile $252 million • Tuscaloosa $144 million • Madison $127 million • Montgomery $315 million • 8 counties receive payments in excess of $60 million. • 16 counties receive payments in excess of $40 million. • 31 counties receive payments in excess of $20 million. FY 2005

22. Financial Impact by Hospital • Without Medicaid revenue, critical components of Alabama’s healthcare infrastructure could not continue to exist. • 52% of the patient days at The Children’s Hospital of Alabama are paid for by Medicaid. • 77% of the patient days at USA Children’s and Women’s Hospital are paid for by Medicaid. • Source: Information obtained from Medicare Cost Reports as filed.

23. Program Funding

24. Where It Comes From, Where It Goes State Funds 29.17 % Administrative Costs 2.0% Federal Funds 70.83% Benefit Payments 98.0% FY 2005

25. Distribution of Payments Excluding Hospital Disproportionate Share Payments FY 2005

26. Dental Care Expenditures FY 1998-2005 Millions FY

27. Medical Care Expenditures FY 1994-2005 Billions FY Excludes DSH payments, enhancements, and pharmacy rebates

28. History of Unfunded Mandates • Medicare Modernization Act, 2003 • Health Insurance Portability and Accountability Act • (Currently implementing NPI) • Pryor Amendment, 1990 (Mandated open drug formulary) • OBRA 1989 (Mandated the EPSDT program) • CCA 1988 (Mandated coverage of QMB)

29. General Fund Contributions Medicaid as a Percent of the GF FY

30. Medical Services Update

31. Town Hall Presentation to Provider Support Personnel

32. Goal Improve health care outcomes for Medicaid recipients through creation of a medical home while containing the escalating cost of quality health care.

33. Basic Program Concepts • Providers enroll as a Primary Medical Provider (PMP) • Patients are assigned to a PMP • Services must be provided directly or through referral (NO REFERRAL needed for Dental Services) • PMPs are paid a monthly case management fee based on signed contract

34. Who Can Be A PMP? • Pediatricians • Internists • Family Practitioners • General Practitioners • OB/GYNs • FQHC • RHC • Specialists (ex: special needs child)

35. Who Is IN Patient 1st? • SOBRA Children • MLIF Eligibles • Infants Of SSI Mothers • Aged • Blind • Disabled

36. Who is NOT In? • Foster Children • SOBRA Adults • Dual Eligibles • Institutionalized (nursing homes, group homes, MR facilities, DYS)Lock-Ins • Enrollees of Private HMO • Medically Exempt

37. Real World Numbers • 1,018 PMPs Enrolled • 944 Physicians • 74 Clinic Based • 448,708 Total Enrollees • 84,247 Over 21 • 364,461 Under 21 * As of 4/20/06

38. Moving Into the 21st CenturyTools to Help the PMP Manage the Patient In-Home Monitoring InfoSolutions ePrescribing

39. In-Home Monitoringaka Disease Management • Partnership with USA Hospital and the Alabama Department of Public Health (ADPH) • Telemetry concept • Targets chronic diseases through claims utilization • Diabetics initial phase • Can monitor blood sugars, weight and blood pressure • Coordination with Primary Physician • Supported with case management • Web based with real-time reporting available

40. InfoSolutions Purpose is to inform providers of prescription activity based on Medicaid paid claims data. • Desktop or PDA tool for physicians • Download patient prescription information

41. e-PrescribingComponent of InfoSolutions • Download prescription history • Automatically alerted to potential drug-to-drug interactions • Prescribe/refill multiple medications • Print prescriptions up to 30 feet away using Bluetooth technology • Establish “favorites” list of frequently prescribed medications • View both Blue Cross/Medicaid formulary

42. Plan first • Different from “regular” family planning • Have to use enrolled providers • Providers dispense birth control pills and the “patch” • Nuva Ring is not covered • Women will have to recertify each year

43. Successful … very • 95,448 women enrolled (3/06) • Teen enrollment grew by 21% during 1st five years • 9,014 births averted in DY 4 (10/03-9/04) • Approximately 25% of women utilize private providers (in addition or instead of public) • Enrollees were 42% more likely to use contraceptives and 33% more likely touse effectively

44. Pharmacy Update

45. Prescription Utilization FY 2005

46. Pharmacy ExpendituresPercent Change from Previous Year Net of Rebates

47. Program Update • The Preferred Drug List (PDL), monthly brand limit, and system edits continue to be important management tools. • These programs are estimated to save 20% of the pharmacy program expenditures in FY 2007. Projected FY 2007 expenditures with program initiatives - $443.6; without initiatives - $554.5; before rebates. Medicaid Fiscal Division

48. Monthly Brand Limit • July 1, 2004 a monthly brand limit was implemented, allowing 4 brand prescriptions per month with unlimited generic and OTC prescriptions. • Children and nursing home patients are excluded. • Anti-psychotic and anti-retroviral drugs are allowed up to total of 10 brand prescriptions. • Allowances are made for additional brands per month for certain classes if a physician needs to “switch” a patient from one brand to another in the event of adverse or allergic reactions.

49. PDL Update • November 1, 2003 a Preferred Drug List (PDL) was implemented, requiring that drug classes be reviewed by our Pharmacy and Therapeutics (P&T) Committee for clinical recommendations for inclusion into the PDL. • Medicaid is currently re-reviewing implemented classes into our PDL to ensure up-to-date clinical information is taken into consideration for PDL clinical decisions.

50. Medicare Part D Update